The Cost of Driver Attrition – And What To Do About It
By trapezegroup April 18, 2016 Reading time:
Did you know that in the UK almost half of new drivers leave within their first 12 weeks of employment?
The impact of this startling – and frightening – statistic becomes even more worrying when you consider that it costs around £3,500 to recruit and train each driver. Just stop for a second to calculate what this means to your organisation.
Not only does this represent a huge, immediate financial impact, it also reduces the level of service you can provide passengers – since as we well know, perception of poor service is one of the main reasons people don’t use buses.
So poor driver retention is simultaneously adding cost to the business while eroding revenues achieved through ridership.
It’s an issue with huge implications. And it simply can’t continue.
The bottom line
During my time working as a bus depot manager, I understood that each new driver came with a cost to account for recruitment, training, uniform, equipment and associated administrative resources, including training materials and manuals, as well as the cost of running large training facilities and buildings.
For example’s sake, let’s take a standard intake of around 130 trainee drivers and multiply it by £3,500. The overall cost is therefore £455,000. Now if these drivers then stay with the business and deliver great quality service to passengers for the next five to 10 years, it was probably a wise investment.
However, we know that statistically speaking, 65 of these new drivers will leave after 12 weeks. So for each intake of new drivers, operators are losing around £227,500.
If the figure above isn’t already scaring you, consider that it’s probably a conservative estimate. The Emerald Insight study notes that one leading UK bus operator was losing over £1 million per year due to inefficient driver retention strategies.
Indeed, the paper also notes that a 30% driver turnover across a bus division with 20,000 drivers can result in an annual recruitment need of around 6,000 drivers. That’s around £21 million per year.
Even if your turnover is lower – around 10%, say – the cost is still frightening: in a division of 10,000 drivers, a 10% turnover is a cost of £3.5 million each year.
Damage to your business
Of course there are also other costs that may not show up on a spreadsheet, but which can nonetheless have a potentially catastrophic impact on the business as a whole.
Consider, for example, the impact on employee’s morale, as they watch drivers come and go through a seemingly endless revolving door. This isn’t simple conjecture: this detailed white paper explains that “higher staff turnover lowers morale of staff and heads of departments”.
Lower morale has implications for any business: employees become less productive and a cyclical pattern can evolve whereby those with low morale leave the business, and those who remain are despondent and more likely to follow their peers out of the door.
And when drivers leave they take valuable skills and knowledge that isn’t easily replaced. This UK Government report on skills shortages notes “high levels of skills deficiencies, in particular in the Transport and Communication industries”, with 64% of employers in the UK Transport sector reporting that new recruits were not well prepared compared to the all-sector average.
Because new drivers tend to perform less well than their experienced peers, the quality of service they are able to offer passengers can be diminished . This is understandable, since their focus is likely to be on safety and schedule adherence, with little room for customer service.
And as with so many customer-facing roles, many of the required skills are learned over time, or passed on by experienced staff who have been with the business a long time. If drivers are leaving the business, who is passing on this precious knowledge and experience?
So, what can we do to address this challenge before it’s too late?
Understanding why drivers leave
Retaining staff is not dependent on any one factor. Of course, driver pay is important, but other factors are just as important – so true long-term loyalty from an employee cannot necessarily be bought.
This study from the US suggests that non-financial factors – including the work environment, service routes, ‘fair’ or ‘unfair’ scheduling and target expectations, interaction with managers, equipment conditions and company policies – can make or break driver retention efforts.
Indeed, the researchers identified six key factors as being crucial to promoting driver retention:
- Listening to drivers and requesting their feedback
- Making working lives convenient by reducing administrative tasks and improving “dispatcher effectiveness”
- Fair HR processes and procedures
- More effective communications
- Increasing safety and improving quality of equipment
- Improve workplace morale by increasing interaction with colleagues
Technology for driver retention
For long-term driver retention, overall job satisfaction depends more upon how drivers are treated than how well they are paid. So isn’t it time to really focus efforts on finding ways to make drivers’ lives more efficient, safe, stress-free – and ultimately happier?
Regularly providing feedback and rewarding drivers for good work needn’t be thought of as another administrative burden for bus depot managers, who may be concerned about how much time they have available to send emails and letters to their staff and organise meetings and interviews – in fact such communications can be easy to implement.
Technology solutions exist that can help administrative staff and managers see when drivers have performed well so they can let them know that the company is pleased with their performance. This can increase driver morale, and thereby reduce driver turnover rates.
As this article notes, “if people are communicated with in an effective manner they will be much more engaged with the company/team and have a more positive attitude toward their work.”
As an added bonus, these types of tools will also free up time for depot managers, enabling them to focus on other important areas of their jobs such as interacting with new drivers and personally overseeing how they are being inducted into the business. Managers can thereby evaluate how recruitment and training strategies are working, and more easily suggest corrective measures be taken where necessary.
Fair HR processes and procedures: transparency is key
Closely linked with communication is the way drivers interact with HR departments and processes.
It’s vital that bus operators ensure all their HR processes and procedures are run and managed effectively, so drivers are more likely to perceive an organisation’s working practices as being fair. Nothing undermines driver satisfaction levels quite like the suspicion of unfairness. In fact, the mere suspicion or perception of unfairness can undermine the trust between an organisation and its drivers, causing rifts and resentment.
Fortunately, there are technology solutions available to managers and HR departments that ensure any procedure that requires a policy and process (e.g. training schedules, qualifications, disciplines) is completely controlled. Nobody can dispute processes because they are all entirely transparent.
Transparency itself also plays a crucial role in driver retention, and as this article indicates, can also bring benefits in terms of company culture, employee engagement and productivity. In terms of employee retention the evidence is clear: the article notes that transparency “ensures a low staff turnover” – with 82% of employees saying it helps build a “sense of family” and 79% more likely to “love” the place they work if they feel processes are controlled and transparent.
Building trust and making working lives easier
Of course, a key part of minimising staff turnover in any business is ensuring employees don’t face stressful working lives. In the bus industry, drivers and managers alike can find certain processes, such as duty allocation and processing holiday requests, incredibly stressful. There can be a lot of bureaucracy and administration here which causes confusion, stress, and negatively impacts driver morale.
In the past, duty allocation has often led to drivers feeling distrustful of the processes that determine whether they are granted the holidays they ask for, or how shift-swaps are handled. Paper-based systems can see requests lost, eroding confidence in the system and the company itself. Furthermore, a lack of transparency – with processes carried out behind the counter, away from view – means drivers can start to feel out of the loop.
Fortunately, there are again technology solutions that can streamline processes here, reducing driver stress and confusion, and ensuring this critical transparency is achieved.
In bus companies – as with any business or organisation – open and transparent relationships are the foundation of trust and collaboration: two integral factors in making employees happier, more productive – and ultimately more loyal.
Using tools that make booking holiday requests and dealing with duty allocation easier means that employees’ working lives become much easier and more comfortable. Reduced stress and increased happiness in their roles are vital factors that will increase the likelihood of drivers remaining within the same bus company for many years.
Drivers are fundamental to the success of bus operations – and all too often undervalued by those around them.
Our drivers are responsible for ensuring safety, managing passenger disputes, retailing, information provision, delivery of customer service, ensuring buses are tidy and checking for lost property – and all while dealing with driving hazards, delays, meeting regulatory requirements and generating the revenue that keeps the industry going.
If we recognise the importance of drivers – and the cost of losing them – isn’t it time to focus our energies on finding more effective ways to keep them in the business?
Original article written by Pete Adney and published by Trapeze United Kingdom: http://www.trapezegroup.co.uk/article/cost-of-driver-attrition-what-to-do-about-it
Reference: “Induction process puts First UK Bus on route to greater efficiency”, Human Resource Management International Digest, Vol. 17 Iss 4 pp. 6 – 9 http://www.emeraldinsight.com/doi/pdfplus/10.1108/09670730910963235